The stock market looks like an easy way to grow wealth… but is it?
Before you invest, beware of these common psychological traps that could cost you!
Recency Bias
"This stock has been performing well… it must continue, right?"
Investors often assume recent performance will continue. But what goes up, can come down!
mean reversion is the norm
Short-term momentum is deceptive.After a big rally, stocks often return to their average. This Makes Chasing trends dangerous.
HERD MENTALITY
"If everyone is investing, it must be safe, right?"
"Wrong! Markets often peak when optimism is highest. Following the crowd blindly can lead to losses."
Wrong Timing
"The stock market is designed to transfer money from the Active to the Patient."
~ Warren Buffett
"Trying to predict the perfect time to invest? Even experts get it wrong."Timing the market is risky; time in the market matters more.
how to avoid these traps
✅ Invest based on fundamentals – Look at value, not hype.✅ Diversify & Research – Don’t put all eggs in one basket.✅ Stick to your plan – Markets fluctuate, but discipline wins.